SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities Exchange
Act of 1934 (Amendment No. )
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14c-5(d)(2))
[ X ] Definitive Information Statement
MEEDER ADVISOR FUNDS
(Name of Registrant as Specified in its Charter)
Payment of filing fee (Check the appropriate box):
[ X ] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g)
and 0-11
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration No.
(3) Filing Party
(4) Date Filed
MEEDER
ADVISOR FUNDS
THE CORE EQUITY FUND
INFORMATION STATEMENT
February 28, 2001
MEEDER
ADVISOR FUNDS
6000 Memorial Drive
Dublin, OH 43017
614-760-2159
Toll Free 800-494-3539
Fax: 614-766-6669
meederadvisorfunds@meederfinancial.com
MEEDER
ADVISER FUNDS THE CORE EQUITY FUND
Information Statement * February 28, 2001
TO THE SHAREHOLDERS:
Meeder Advisor Funds is a family of mutual funds organized as a
Massachusetts business trust (the "Trust"). The Core Equity Fund (the "Fund"), a
series of the Trust, is a multi-managed, diversified open-end investment
management company known as a mutual fund. The Fund's objective is to seek
capital growth by investing primarily in a diversified portfolio of domestic
common stocks with greater than average growth characteristics selected
primarily from the Standard & Poor's 500 Composite Stock Price Index (the "S&P
500"). Neither the Trust nor the Fund has an investment adviser because the
Trust seeks to achieve the investment objective of the Fund by investing all of
its investable assets in the Growth Stock Portfolio (the "Portfolio"), a
corresponding open-end management company having the same investment objective
as the Fund. Assets of the Portfolio representing each of the industry sectors
of the S&P 500 are managed by one or more sub-subadvisers.
On February 10, 1998, the Portfolio received an exemptive order from the
Securities and Exchange Commission (the "SEC") that permits the Portfolio's
subadviser (the "Subadviser") to hire new sub-subadvisers and to make certain
changes to existing sub-subadvisory contracts with the approval of the Board of
Trustees, without obtaining shareholder approval. On October 28, 2000, at a
regular meeting of the Board of Trustees of the Portfolio, the Trustees approved
a new sub-subadvisory agreement for the Portfolio. The new sub-subadvisory
agreement approved by the Board of Trustees was entered into among the
Portfolio, the Subadviser, and Matrix Asset Advisors, Inc. ("Matrix"). Matrix
assumed investment advisory responsibility for the finance sector of the
Portfolio on December 1, 2000.
This information statement informs you of the circumstances surrounding the
Board's approval of the new sub-subadvisory agreement and provides you with an
overview of its terms.
By order of the Board
/s/ Donald F. Meeder
Secretary
THIS IS NOT A PROXY STATEMENT. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE NOT
REQUESTED TO SEND US A PROXY.
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MEEDER
ADVISER FUNDS THE CORE EQUITY FUND
Information Statement * February 28, 2001
MEEDER ADVISOR FUNDS'
CORE EQUITY FUND
6000 MEMORIAL DRIVE
DUBLIN, OHIO 43017
(800) 494-FLEX
INFORMATION STATEMENT
FEBRUARY 28, 2001
GENERAL INFORMATION
This information statement is being furnished to the shareholders of the
Core Equity Fund in lieu of a proxy statement, pursuant to the terms of an
exemptive order the Fund and the Portfolio received from the SEC. The exemptive
order permits the Portfolio's subadviser to hire new sub-subadvisers and to make
certain changes to existing sub-subadvisory contracts with the approval of the
Board of Trustees, without obtaining shareholder approval.
The Trust is an open-end management investment company organized as a
Massachusetts business trust on June 22, 1992. The Trust's offices are at 6000
Memorial Drive, Dublin, Ohio 43017.
We are providing shareholders of the Fund as of February 27, 2001 with the
information statement. This information statement relates to the approval by the
Trustees of the new sub-subadvisory agreement (the "Sub-subadvisory Agreement")
dated December 1, 2000 among the Portfolio, the Subadviser, and Matrix. Matrix
assumed its sub-subadvisory duties with respect to the Portfolio on December 1,
2000. The Trustees, including a majority of the Trustees who were not parties to
the Sub-subadvisory Agreement and were not interested persons of those parties
(as defined in the Investment Company Act of 1940), approved the Sub-subadvisory
Agreement on October 28, 2000. The material terms of the new Sub-subadvisory
Agreement are substantially the same as those of the sub-subadvisory agreements
entered into with the Portfolio's other sub-subadvisers (each a "Sub-subadviser"
and collectively, the "Sub-subadvisers"). The sub-subadvisory agreements with
the Sub-subadvisers were last approved by the Trustees on May 3, 2000, and by
the shareholders of the Fund on July 31, 1997. The form of the Sub-subadvisory
Agreement with Matrix is set forth as Exhibit A to this information statement.
The Fund will pay for the costs associated with preparing and distributing
this information statement, which will be mailed on or about February 28, 2001.
THE MANAGER
Meeder Asset Management, Inc. ("Manager"), formerly known as R. Meeder &
Associates, Inc., was incorporated in Ohio in 1974 and maintains its principal
offices at 6000 Memorial Drive, Dublin, Ohio 43017. The Manager serves the
Portfolio pursuant to an Investment Advisory Contract under the terms of which
it has agreed to provide an investment program within the limitations of the
Portfolio's investment policies and restrictions, and to furnish all executive,
administrative, and clerical services required for the transaction of Portfolio
business, other than accounting services and services that are provided by the
Portfolio's custodian, transfer agent, independent accountants, and legal
counsel. As of December 31, 2000, the Manager served as the investment adviser
to eight open-end investment companies with aggregate assets of approximately
$550 million.
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MEEDER
ADVISER FUNDS THE CORE EQUITY FUND
Information Statement * February 28, 2001
THE SUBADVISER
Sector Capital Management, L.L.C. (the "Subadviser"), 5350 Poplar Avenue,
Suite 490, Memphis, Tennessee 38119, serves as the Portfolio's subadviser under
an investment subadvisory agreement among the Portfolio, the Manager and the
Subadviser. The Subadviser furnishes investment advisory services in connection
with the management of the Portfolio.
The Subadviser and the Portfolio have entered into a Sub-subadvisory
Agreement with each Sub-subadviser selected for the Portfolio. It is the
Subadviser's responsibility to select, subject to the review and approval of the
Board of Trustees, the Sub-subadvisers who have distinguished themselves by able
performance in respective areas of expertise in sector management and to review
their continued performance. Components of the Subadviser's selection process
include evaluating the investment strategy employed to produce favorable
results, evaluating such performance against a universe of sector benchmarks,
and meeting with selected investment managers to confirm the selection process.
In addition, it is the Subadviser's responsibility to categorize publicly traded
domestic stocks into a specific industry sector.
THE SUB-SUBADVISERS
Currently, the Subadviser has identified ten industry sectors for the S&P
500 and has selected a Sub-subadviser to manage each sector. Each Sub-subadviser
manages those assets of the Portfolio that are allocated to its industry
sector(s).
The Manager and the Subadviser have the ultimate responsibility for the
investment performance of the Portfolio due to the Manager's responsibility to
oversee the Subadviser and the Subadviser's responsibility to oversee the
Sub-subadvisers and recommend their hiring, termination and replacement.
THE ADMINISTRATOR
The Administrator of the Fund is Mutual Funds Service Co., 6000 Memorial
Drive, Dublin, Ohio 43017.
THE UNDERWRITER
The Underwriter of the Fund is Adviser Dealer Services, Inc., 6000 Memorial
Drive, Dublin, Ohio 43017.
SHAREHOLDER REPORTS
The Trust's most recent annual report for the fiscal year ended December
31, 1999 and semi-annual report for the six months ended June 30, 2000 have
previously been sent to shareholders and may be obtained without charge by
writing the Trust at P.O. Box 7177, Dublin, Ohio 43017 or by calling (800)
494-3539.
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MEEDER
ADVISER FUNDS THE CORE EQUITY FUND
Information Statement * February 28, 2001
SHAREHOLDINGS
As of February 13, 2001, the total net asset value of Class A Shares of the
Fund was approximately $7,263,993.42, and there were 450,809.168 Class A Shares
of the Fund outstanding. As of February 13, 2001, the total net asset value of
Class C Shares of the Fund was approximately $5,340,783.82, and there were
333,203.178 Class C Shares of the Fund outstanding.
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of February 13, 2001, the only persons
known by the Trust to be the beneficial owners of more than five percent of the
outstanding shares of the Fund:
Title Number of Shares Percent
OF CLASS NAME & ADDRESS BENEFICIALLY OWNED OF CLASS
- -------- -------------- ------------------ --------
Class C Tennessee Conference Board of 18,095.27 5.43%
Pension of the United Methodist
Church
1110 19th Avenue South
Nashville, TN 37212-2110
OWNERSHIP OF MANAGEMENT
The following table sets forth, as of February 13, 2001, the beneficial
ownership of the Fund by each executive officer and trustee of the Trust who
owns shares and by all officers and directors as a group:
Title Number of Shares Percent
OF CLASS NAME & ADDRESS BENEFICIALLY OWNED(1) OF CLASS
- -------- -------------- --------------------- --------
Class C Donald F. Meeder* 1,269.132 0.381%
Class C All trustees and officers as
a group (13 in group) 1,269.132 0.381%
* 6000 Memorial Drive, Dublin, Ohio 43017.
(1) Except as otherwise noted, none of the named individuals shares with another
person either voting or investment power as to the shares reported.
NEW SUB-SUBADVISORY AGREEMENT
On October 28, 2000, the Trustees, including a majority of the Trustees who
are not parties to the Sub-subadvisory Agreement or interested persons of such
parties (as defined in the Investment Company Act), unanimously approved the
Sub-subadvisory Agreement and the selection of Matrix as a Sub-subadviser.
The Sub-subadvisory Agreement contains substantially the same terms and
conditions as the sub-subadvisory agreements with the Portfolio's other
sub-subadvisers. See "Terms of Sub-
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MEEDER
ADVISER FUNDS THE CORE EQUITY FUND
Information Statement * February 28, 2001
subadvisory Agreement" below.
Section 15 of the Investment Company Act of 1940 requires that a majority
of the Portfolio's outstanding voting securities approve the Sub-subadvisory
Agreement. However, on February 10, 1998, the SEC issued an order granting the
Portfolio and the Manager exemptive relief from the requirements of Section 15.
According to the SEC's order, which is subject to a number of conditions, the
Subadviser may now enter into sub-subadvisory agreements on behalf of the
Portfolio without receiving prior shareholder approval. Thus, execution and
implementation of the Sub-subadvisory Agreement did not require shareholder
consent.
BOARD CONSIDERATION OF SUB-SUBADVISORY AGREEMENT
At a regular meeting of the Board of Trustees, it considered and
unanimously approved the Sub-subadvisory Agreement on October 28, 2000. In
considering approval of the Sub-subadvisory Agreement, the Trustees, including
the non-interested Trustees, considered whether approval of the Sub-subadvisory
Agreement was in the best interests of the Portfolio and the shareholders of the
Trust. At the meeting, the Trustees reviewed the provisions of the
Sub-subadvisory Agreement, including the services to be performed by the
Subadviser and Matrix; the compensation to be paid by the Manager to the
Subadviser for these services; the compensation to be paid by the Subadviser to
Matrix for its services; and the initial term, renewal, termination, and other
material provisions of the Sub-subadvisory Agreement. The Board also considered
the nature, quality and extent of services expected to be provided to the
Portfolio by Matrix, as well as its reputation in the asset management industry.
Based upon their review, the Trustees concluded that the Sub-subadvisory
Agreement was reasonable, fair, and in the best interests of the Portfolio and
the shareholders of the Trust, and that the fee provided in the Sub-subadvisory
Agreement was fair and reasonable. Accordingly, and after consideration of the
above factors and such other factors and information as they deemed relevant,
the Trustees, including the non-interested Trustees, unanimously approved the
Sub-subadvisory Agreement.
INFORMATION CONCERNING MATRIX
Matrix Asset Advisors, Inc., 747 Third Avenue, 31st Floor, New York, New
York 10017, began managing the finance sector of the Portfolio on December 1,
2000. Matrix, a registered investment adviser, has been providing investment
services to individuals, pension and profit sharing plans, trusts, charitable
organizations and corporations since 1986. As of December 31, 2000, the firm
managed approximately $682 million in assets.
David A. Katz is the portfolio manager primarily responsible for the
day-to-day management of those assets of the Portfolio allocated to Matrix. Mr.
Katz, a co-founder of Matrix, is the President of the firm and has served as its
Chief Investment Officer since the firm's inception. The directors of Matrix are
Mr. Katz, John Gates, President Emeritus of Matrix and Douglas S. Altabef,
Managing Director of Matrix. Messrs. Katz and Altabef each owns 10% or more of
the outstanding voting securities of Matrix. The address of the directors and
10% or greater shareholders is 747 Third Avenue, 31st Floor, New York, NY 10017.
Matrix does not manage any other mutual funds having an investment
objective similar to that of the Fund.
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MEEDER
ADVISER FUNDS THE CORE EQUITY FUND
Information Statement * February 28, 2001
TERMS OF SUB-SUBADVISORY AGREEMENT
Under the terms of the Sub-subadvisory Agreement, Matrix is compensated by
the Subadviser at an annual rate of 0.25% of the Portfolio's average daily net
assets assigned to it, the same fee that is paid to each of the other
sub-subadvisers of the Portfolio. For the period from December 1, 2000
(effective date of the Sub-subadvisory Agreement) through December 31, 2000, the
Portfolio accrued an advisory fee payable to Matrix of $2,148. The
Sub-subadvisory Agreement provides that, subject to the supervision of the Board
of Trustees, the Manager and the Subadviser, Matrix is responsible for the
day-to-day management of the finance sector of the Portfolio, in accordance with
the investment objectives and policies of the Portfolio as reflected in the
current Prospectus and Statement of Additional Information of the Trust and as
may be adopted from time to time by the Board of Trustees. In accordance with
the requirements of the Investment Company Act of 1940, Matrix maintains, keeps
current and preserves on behalf of the Portfolio all books and records relating
to the transactions its executes, and renders to the Trustees such periodic and
special reports as the Board of Trustees may reasonably request.
DURATION AND TERMINATION. The Sub-subadvisory Agreement will remain in full
force and effect for a period of two years from its effective date, and will
continue thereafter as long as its continuance is specifically approved at least
annually by vote of a majority of the outstanding voting securities (as that
term is defined in the Investment Company Act of 1940) of the Portfolio, or by
the Board of Trustees, including the approval by a majority of non-interested
Trustees, at a meeting called for the purpose of voting on such approval;
provided, however, that (1) the Sub-subadvisory Agreement may be terminated at
any time, upon thirty days prior written notice to the other parties thereto,
without the payment of any penalty, by vote of the Board of Trustees, the
Subadviser, Matrix, or by vote of a majority of the outstanding voting
securities of the Portfolio, and (2) the Sub-subadvisory Agreement will
terminate immediately in the event of its assignment (within the meaning of the
Investment Company Act of 1940).
LIABILITY. The Sub-subadvisory Agreement provides that, in the absence of
willful misfeasance, bad faith or gross negligence, violation of applicable law,
or reckless disregard of its duty or of its obligations thereunder, Matrix will
not be liable for any act or omission in connection with its activities as
sub-subadviser to the Portfolio.
SHAREHOLDER PROPOSALS
As a Massachusetts business trust, the Trust is not required to hold annual
meetings of shareholders, and the Trustees currently do not intend to hold such
meetings unless shareholder action is required in accordance with the Investment
Company Act of 1940 or the Trust's Declaration of Trust. A shareholder proposal
intended to be presented at any meeting of shareholders of the Trust must be
received by the Trust at a reasonable time before the Trustees' solicitation
relating thereto is made in order to be included in the Trust's proxy statement
and form of proxy relating to that meeting and presented at the meeting. The
mere submission of a proposal by a shareholder does not guarantee that the
proposal will be included in the proxy statement because certain rules under the
federal securities laws must be complied with before inclusion of the proposal
is required.
Donald F. Meeder
Secretary
Dated: February 28, 2001
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MEEDER
ADVISER FUNDS THE CORE EQUITY FUND
Information Statement * February 28, 2001
EXHIBIT A
MONEY MANAGER AGREEMENT
Effective Date: December 1, 2000
Termination Date: Two years after
Effective
Matrix Asset Advisors, Inc.
747 Third Avenue, 31st Floor
New York, NY 10017
Attn: David A. Katz
Re: The Growth Stock Portfolio
Ladies and Gentlemen:
The Growth Stock Portfolio (all of the assets of the Growth Stock Portfolio
including those assets not managed by the Money Manager, hereinafter referred to
as the "Portfolio") is an open-end management investment company registered as
an investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and subject to the rules and regulations promulgated thereunder.
Sector Capital Management, L.L.C. (the "Manager") acts as the investment
subadvisor of the Portfolio pursuant to the terms of an Investment Advisory
Agreement, and is an "investment adviser", as that term is defined in Section
2(a)(20) of the 1940 Act, to the Portfolio. The Manager is responsible for the
day-to-day management of the Portfolio and for the coordination of investments
of the Portfolio's assets; however, specific portfolio purchases and sales for
the Portfolio, or a portion thereof, are to be made by the portfolio management
organizations recommended and selected by the Manager, subject to the approval
of the Board of Trustees of the Portfolio (the "Board").
1. APPOINTMENT AS A MONEY MANAGER. The Manager and the Portfolio hereby
appoint and employ Matrix Asset Advisors, Inc. (the "Money Manager") as a
discretionary investment sub-subadviser to the Portfolio for that portion of the
assets of the Portfolio which the Manager determines from time to time to assign
to the Money Manager (those assets being referred to as the "Account").
2. ACCEPTANCE OF APPOINTMENT: STANDARD OF PERFORMANCE. The Money Manager
accepts the appointment as a discretionary investment sub-subadviser to the
Portfolio and agrees to use its best professional judgment to make and implement
investment decisions for the Portfolio with respect to the investments of the
Account in accordance with the provisions of this Agreement.
3. PORTFOLIO MANAGEMENT SERVICES OF THE MONEY MANAGER. The Money Manager is
hereby employed and authorized to select portfolio securities for investment by
the Portfolio, to determine whether to purchase and sell securities for the
Account, and upon making any purchase or sale decision, and without prior
consultation, to place orders for the execution of such portfolio
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MEEDER
ADVISER FUNDS THE CORE EQUITY FUND
Information Statement * February 28, 2001
transactions in accordance with paragraphs 5 and 6 hereof and Exhibit A attached
hereto and incorporated by this reference herein (as it may be amended in
writing by the parties from time to time). In providing portfolio management
services to the Account, the Money Manager shall be subject to such investment
restrictions as are set forth in the 1940 Act and rules thereunder, the
supervision and control of the Board, such specific instructions as the Board
may adopt and communicate to the Money Manager; the investment objectives,
policies and restrictions of the Portfolio furnished pursuant to paragraph 4;
and written instructions from the Manager. The Money Manager shall maintain on
behalf of the Portfolio the records listed in Exhibit B attached hereto and
incorporated by this reference herein (as it may be amended in writing by the
parties from time to time). At the Portfolio's or the Manager's reasonable
request (as communicated by the Board or the officers of such entities), the
Money Manager will consult with the officers of the Portfolio or the Manager, as
the case may be, with respect to any decision made by it with respect to the
investments of the Account. Meeder Asset Management, Inc., the investment
adviser to the Portfolio, will invest any cash in the Account.
4. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS. The Portfolio shall
provide the Money Manager with a written statement of the investment objectives
and policies of the Portfolio and any specific investment restrictions
applicable thereto as established by the Portfolio, including those set forth in
its Prospectus, as amended from time to time. The Portfolio retains the right,
on reasonable prior written notice to the Money Manager, from the Portfolio or
the Manager, to modify in writing any such objectives, policies or restrictions
in any manner at any time. The Money Manager shall have no duty to investigate,
and the Money Manager may also rely upon, any instructions received from the
Portfolio, the Manager, or both, and absent manifest error, such instructions
shall be presumed reasonable.
5. TRANSACTION PROCEDURES. All transactions will be settled by Firstar,
N.A. (the "Custodian"), or such depository or agents as may be designated by the
Custodian, as custodian for the Portfolio, of all cash and/or securities due to
or from the Account, and the Money Manager shall not have possession or custody
thereof or any responsibility or liability with respect thereto. The Money
Manager shall advise Mutual Funds Service Co. ("MFSC"), the accounting agent for
the Portfolio, and confirm by facsimile all investment orders for the Portfolio
placed by it with broker/dealers at the time and in the manner set forth in
Exhibit A hereto. The Portfolio shall be responsible for all custodial
arrangements and the payment of all custodial charges and fees and, upon the
Money Manager giving proper instructions to MFSC, the Money Manager shall have
no responsibility or liability with respect to custodial arrangements or the
acts, omissions or other conduct of the Custodian.
6. ALLOCATION OF BROKERAGE. The Money Manager shall have the authority and
discretion to select broker/dealers to execute portfolio transactions initiated
by the Money Manager, and for the selection of the markets on which the
transactions will be executed.
A. In doing so, the Money Manager's primary objective shall be to
select a broker/dealer that can be expected to obtain the best execution
for the Portfolio. However, this responsibility shall not be deemed to
obligate the Money Manager to solicit competitive bids for each
transaction; and the Money Manager shall have no obligation to seek the
lowest available commission cost to the Portfolio, so long as the Money
Manager believes in good faith, based upon its knowledge of
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MEEDER
ADVISER FUNDS THE CORE EQUITY FUND
Information Statement * February 28, 2001
the capabilities of the broker/dealer selected, that the commission cost is
reasonable in relation to the total quality and reliability of the
brokerage and research services made available by the broker/dealer to the
Money Manager viewed in terms of either that particular transaction or of
the Money Manager's overall responsibilities with respect to its clients,
including the Portfolio, as to which the Money Manager exercises investment
discretion, notwithstanding that the Portfolio may not be the direct or
exclusive beneficiary of any such services or that another broker/dealer
may be willing to charge the Portfolio a lower commission on the particular
transaction. The Money Manager shall be under no obligation to execute any
order in a fashion either preferential to the Portfolio relative to other
accounts managed by the Money Manager or otherwise materially adverse to
such other accounts.
B. The Portfolio shall retain the right to request that transactions
involving the Account that give rise to brokerage commissions, in an annual
amount determined in accordance with the next sentence, be executed through
one or more broker-dealers selected by the Portfolio, which broker-dealers
will allocate a portion of such commissions, in an amount mutually
satisfactory to the Portfolio and the broker-dealer selected, to pay the
direct expenses of the Portfolio or its feeder funds. Any amount so
requested may be up to the amount determined by multiplying 25% of the
total number of shares traded by the Account for the calendar year times
the average commission per share traded for the Account for the calendar
year. The Money Manager may reject any request for directed brokerage that
does not appear to it to be reasonable or for which it reasonably believes
that best execution will not be obtained. The Money Manager shall not be
liable for failure to comply with such directed brokerage threshold if it
rejects any such request for directed brokerage in accordance with the
immediately preceding sentence or if the Portfolio fails to make sufficient
requests to enable the Money Manager to meet such threshold. The Manager
and the Portfolio acknowledge that, with respect to those transactions for
which the Portfolio has requested that the transaction be executed through
one or more broker-dealers selected by the Portfolio, such direction may
result in the Portfolio paying higher commissions than otherwise might be
obtainable or receiving less favorable net prices and execution of some
transactions, or both, and may result in the Money Manager's inability to
aggregate trades for the Portfolio with those of the Money Manager's other
clients in order to obtain volume discounts.
C. The Portfolio agrees that it will provide the Money Manager with a
list of broker/dealers which are "affiliated persons" of the Portfolio's
other money managers. Upon receipt of such list, the Money Manager agrees
that it will not execute any portfolio transactions with a broker/dealer
which is an "affiliated person" (as defined in the 1940 Act) of the
Portfolio or of any money manager for the Portfolio without the prior
written approval of the Portfolio.
D. In executing portfolio transactions for the Portfolio, the Money
Manager may, to the extent permitted by applicable laws and regulations,
but shall not be obligated to, aggregate the securities to be sold or
purchased with those of other clients if, in the Money Manager's reasonable
judgment, such aggregation (i) will result in an overall economic benefit
to the Portfolio, taking into consideration the advantageous selling or
purchase price, brokerage commission and other expenses, and trading
requirements, and (ii) is not inconsistent with the policies set forth in
the Portfolio's registration statement and the Portfolio's Prospectus and
Statement of Additional Information. In such event, the Money Manager will
allocate the securities so purchased or sold, and the expenses incurred in
the transaction, in an equitable manner, consistent with its fiduciary
obligations to the Portfolio and such other clients.
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MEEDER
ADVISER FUNDS THE CORE EQUITY FUND
Information Statement * February 28, 2001
7. PROXIES. Unless the Manager gives written instructions to the contrary,
the Money Manager shall vote all proxies solicited by or with respect to the
issuers of securities in which assets of the Account may be invested. The Money
Manager shall use its best good faith judgment to vote such proxies in a manner
which best serves the interests of the Portfolio's investors.
8. REPORTS TO THE MONEY MANAGER. The Portfolio and the Manager shall
furnish or otherwise make available to the Money Manager such information
relating to the business affairs of the Portfolio, including periodic reports
concerning the Portfolio, as the Money Manager at any time, or from time to
time, may reasonably request in order to discharge its obligations hereunder.
9. FEES FOR SERVICES. The compensation of the Money Manager for its
services under this Agreement shall be calculated and paid monthly at an annual
rate of 0.25% of the Account's average daily net assets.
10. OTHER INVESTMENT ACTIVITIES OF THE MONEY MANAGER. The Portfolio
acknowledges that the Money Manager, or one or more of its affiliates, may have
investment responsibilities or render investment advice to, or perform other
investment advisory services for, other individuals or entities (the "Affiliated
Accounts"). Subject to the provisions of paragraph 2 hereof, the Portfolio
agrees that the Money Manager and its affiliates may give advice, exercise
investment responsibility and take other action with respect to the Affiliated
Accounts which may differ from the advice given or the timing or nature of
action taken with respect to the Account, provided that the Money Manager acts
in good faith, and provided further that it is the Money Manager's policy to
allocate, within its reasonable discretion, investment opportunities to the
Account over a period of time on a fair and equitable basis relative to the
Affiliated Accounts, taking into account the investment objectives and policies
of the Portfolio and any specific investment restrictions applicable thereto.
The Portfolio acknowledges that one or more of the Affiliated Accounts may at
any time hold, acquire, increase, decrease, dispose of or otherwise deal with
positions in investments in which the Account may have an interest from time to
time, whether in transactions which may involve the Account or otherwise. The
Money Manager shall have no obligation to acquire for the Account a position in
any investment which any Affiliated Account may acquire, and the Portfolio shall
have no first refusal, co-investment or other rights in respect of any such
investment, either for the Account or otherwise.
11. LIMITATION OF LIABILITY. The Money Manager shall not be liable for, and
shall be indemnified by the Portfolio for any action taken, omitted or suffered
to be taken by it in its reasonable judgment, in good faith and believed by it
to be authorized or within the discretion or rights or powers conferred upon it
by this Agreement, or in accordance with (or in the absence of) specific
directions or instructions from the Portfolio or the Manager; provided, however,
that such acts or omissions shall not have resulted from the Money Manager's
willful misfeasance, bad faith or gross negligence, violation of applicable law,
or reckless disregard of its duty or of its obligations hereunder. The rights
and obligations that are provided for in this Paragraph 11 shall survive the
cancellation, expiration or termination of this Agreement.
12. CONFIDENTIALITY. Subject to the right of the Money Manager and the
Portfolio to comply with applicable law, including any demand or request of any
regulatory or taxing authority having jurisdiction over it, the parties hereto
shall treat as confidential all information pertaining to the Portfolio and the
actions of the Money Manager, the Manager and the Portfolio in respect thereof,
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Information Statement * February 28, 2001
other than any such information which is or hereafter becomes ascertainable from
public or published information. The rights and obligations that are provided
for in this Paragraph 12 shall survive the cancellation, expiration or
termination of this Agreement.
13. USE OF THE MONEY MANAGER'S NAME. The Portfolio and the Manager agree to
furnish the Money Manager at its principal office prior to use thereof copies of
all prospectuses, proxy statements, reports to stockholders, sales literature,
or other material prepared for distribution to stockholders of the feeder funds
of the Portfolio or the public that refer in any way to the Money Manager, and
not to use such material if the Money Manager reasonably objects in writing
within three business days (or such other time as may be mutually agreed) after
receipt thereof. In the event of termination of this Agreement, the Portfolio
and the Manager will continue to furnish to the Money Manager copies of any of
the above-mentioned materials that refer in any way to the Money Manager, and
will not use such material if the Money Manager reasonably objects in writing
within three business days (or such other time as may be mutually agreed) after
receipt thereof.
14. ASSIGNMENT. No assignment, as that term is defined in Section 2(a)(4)
of the 1940 Act, of this Agreement shall be made by the Money Manager, and this
Agreement shall terminate automatically in the event that it is assigned. The
Money Manager shall notify the Manager and the Portfolio in writing sufficiently
in advance of any proposed change of control, as defined in Section 2(a)(9) of
the 1940 Act, to enable the Manager and the Portfolio to consider whether an
assignment as that term is defined in Section 2(a)(4) of the 1940 Act, will
occur, and to take the steps necessary to enter into a new money manager
agreement with the Money Manager or other investment adviser.
15. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE PORTFOLIO. The
Portfolio represents, warrants and agrees that:
A. The Money Manager has been duly appointed by the Board to provide
investment advisory services to the Account as contemplated hereby.
B. The Portfolio will deliver to the Money Manager a true and complete
copy of its current prospectus as effective from time to time, such other
documents or instruments governing the investments of the Portfolio, and
such other information as is necessary for the Money Manager to carry out
its obligations under this Agreement.
C. The organization of the Portfolio and the conduct of the business
of the Portfolio as contemplated by this Agreement, materially complies,
and shall at all times materially comply, with the requirements imposed
upon the Portfolio by applicable law including, but not limited to, Section
15 of the 1940 Act.
16. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF MANAGER. The Manager
represents, warrants and agrees that:
A. The Manager acts as an "investment adviser", as that term is
defined in Section 2(a)(20) of the 1940 Act, to the Portfolio pursuant to
an Investment Subadvisory Agreement with the Portfolio.
B. The appointment of the Money Manager by the Manager to provide the
investment
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Information Statement * February 28, 2001
services as contemplated hereby has been approved by the Board.
C. The Manager is registered as an "investment adviser" under the
Investment Advisers Act of 1940, as amended (the "Advisers Act").
17. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF MONEY MANAGER. The Money
Manager represents, warrants and agrees that:
A. The Money Manager is registered as an "investment adviser" under
the Advisers Act.
B. The Money Manager will maintain, keep current and preserve on
behalf of the Portfolio the records identified in Exhibit B in the manner
required by such Exhibit. The Money Manager agrees that such records (other
than those required by No. 4 of Exhibit B) are the property of the
Portfolio and will be surrendered to the Portfolio promptly upon request.
C. The Money Manager will adopt or has adopted a written code of
ethics complying with the requirements of Rule 17j-1 under the 1940 Act,
will provide to the Portfolio a copy of the code of ethics and evidence of
its adoption, and will make such reports to the Portfolio as required by
Rule 17j-1 under the 1940 Act. The Money Manager has policies and
procedures believed by it to be sufficient to enable the Money Manager to
detect and prevent the misuse of material, nonpublic information by the
Money Manager or any person associated with the Money Manager, in
compliance with the Insider Trading and Securities Fraud Enforcement Act of
1988 and any other applicable federal and state securities laws.
D. The Money Manager will notify the Portfolio of any changes in the
membership of its partnership or in the case of a corporation in the
ownership of more than five percent of its voting securities, within a
reasonable time after such change.
E. Neither the Money Manager nor any of its directors, officers,
employees, or members of an advisory board is (i) ineligible, by reason of
subsection (a) of Section 9 of the 1940 Act to serve or act in such
capacities or (ii) subject to an order of the Securities and Exchange
Commission entered pursuant to subsections (b) or (f) of Section 9 of the
1940 Act.
18. AMENDMENT. This Agreement may be amended at any time, but only by
written agreement among the Money Manager, the Manager and the Portfolio, which
amendment, other than amendments to Exhibits A and B, must be approved by the
Board in the manner required by the 1940 Act.
19. EFFECTIVE DATE. This Agreement shall become effective for the Portfolio
on the effective date set forth on page 1 of this Agreement, and shall continue
in effect until the termination date set forth on page 1 of this Agreement.
Thereafter, the Agreement shall continue in effect for successive annual periods
only so long as its continuance has been specifically approved at least annually
(a) by
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a vote of a majority of the Board or (b) by a vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Portfolio, and
in either case by a majority of the Trustees who are not parties to this
Agreement or interested persons of any parties to this Agreement (other than as
Trustees of the Portfolio) cast in person at a meeting called for purposes of
voting on the Agreement.
20. TERMINATION. This Agreement may be terminated, without the payment of
any penalty, by the Board, the Manager, the Money Manager or by the vote of a
majority of the outstanding voting securities (as that term is defined in the
1940 Act) of the Portfolio, upon 30 days prior written notice to the other
parties hereto. Any such termination shall not affect the status, obligations or
liabilities of any party hereto to any of the other parties that accrued prior
to such termination.
21. APPLICABLE LAW. To the extent that state law shall not have been
pre-empted by the provisions of any laws of the United States heretofore or
hereafter enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of the State
of Ohio, without reference to its choice of law principles.
THE GROWTH STOCK PORTFOLIO
BY: /S/ WESLEY F. HOAG
-------------------------------
Wesley F. Hoag, Vice President
DATE: NOVEMBER 21, 2000
-----------------------------
SECTOR CAPITAL MANAGEMENT, L.L.C.
BY: /S/ WILLIAM L. GURNER
-------------------------------
William L. Gurner, President
DATE: NOVEMBER 22, 2000
-----------------------------
Accepted and agreed to:
MATRIX ASSET ADVISORS, INC.
BY: /S/ DAVID A. KATZ
----------------------------
Authorized Signatory
DATE: NOVEMBER 20, 2000
--------------------------
EXHIBITS: A. Operational Procedures.
B. Recordkeeping Requirements.
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ADVISER FUNDS THE CORE EQUITY FUND
Information Statement * February 28, 2001
EXHIBIT A
OPERATIONAL PROCEDURES
Consistent with its legal and fiduciary obligations as an investment
adviser, the Money Manager (the "MM") shall abide by certain rules and
procedures in order to minimize operational problems. The MM will be required to
have various records and files (as required by regulatory agencies) at its
offices. The MM will have to maintain a certain flow of information to Mutual
Funds Service Co. ("MFSC") and Firstar, N.A. ("Firstar"), the accounting agent
and the custodian bank, respectively, for the Portfolio.
The MM will be required to furnish MFSC with daily information as to
executed trades. MFSC should receive this data no later than 12:00 Noon Eastern
Standard Time on the day after the trade (T+1). MM shall verify that such
information has been received by MFSC. MFSC shall reasonably cooperate to
confirm that it has received such information. The necessary information should
be transmitted via facsimile machine to MFSC in the form of a daily trade
authorization form signed by an authorized individual. A list of authorized
persons with specimen signatures must be sent to MFSC. The authorization will
contain information on which MFSC and Firstar can rely to either accept delivery
or deliver out of the account securities as per each trade by the MM. A
preprinted form will be supplied to the MM by the Portfolio. Upon receipt of
brokers' confirmations, the MM or MFSC will be required to notify the other
party if any differences exist. MFSC will affirm trades through DTC. The
reporting of trades by the MM to MFSC must include the following:
o Whether Purchase or Sale
o Security name
o CUSIP Number
o Ticker Symbol
o Number of shares or principal amount
o Price per share or bond
o Accrued interest
o Commission dollars per trade, or if a net trade
o Executing broker
o Trade date
o Settlement date
o If security is not eligible for DTC (Purchase only), Proper Settlement
Instructions
MFSC will provide the necessary information to Firstar.
When opening accounts with brokers for the Portfolio, the account should be
a delivery versus payment account. No margin accounts are to be maintained. The
broker should be advised to use Firstar's ID system number (NO. 27895), with
interested party ID confirmations to NO. 71394, to facilitate the receipt of
information by Firstar and MFSC. If this procedure is followed, DK problems will
be held down to a minimum and additional costs of security trades will not
become an important factor in doing business.
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ADVISER FUNDS THE CORE EQUITY FUND
Information Statement * February 28, 2001
EXHIBIT B
RECORDS TO BE MAINTAINED BY MONEY MANAGER
1. A record of each brokerage order, and all other portfolio purchases and sales
orders by the Money Manager or on behalf of the Portfolio for, or in connection
with, the purchase or sale of securities, whether executed or unexecuted. Such
records shall include:
A. The name of the broker,
B. The terms and conditions of the order, and of any modification or
cancellation thereof,
C. The time of entry or cancellation,
D. The price at which executed,
E. The time of receipt of report of execution, and
F. The name of the person who placed the order on behalf of the
Portfolio (Rule 31a-1(b)(5) and (6) of the 1940 Act).
2. A record for each fiscal quarter, completed within ten (10) days after the
end of the quarter, showing specifically the basis or bases upon which the
allocation of orders for the purchase and sale of portfolio securities to
brokers or dealers was made, and the division of brokerage commissions or other
compensation on such purchase and sale orders. The record:
A. Shall include the consideration given to:
(i) the sale of shares of a feeder fund of the Portfolio
(ii) the supplying of services or benefits by brokers or dealers
to:
(a) The Portfolio,
(b) The Manager,
(c) Yourself (the Money Manager), and
(d) Any person other than the foregoing
(iii) Any other considerations other than the technical
qualifications of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made available.
Page 1 of Exhibit B
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Information Statement * February 28, 2001
C. Shall describe in detail the application of any general or specific
formula or other determinant used in arriving at such allocation of
purchase and sale orders and such division of brokerage commissions or
other compensation.
D. The identities of the persons responsible for making the
determination of such allocation and such division of brokerage commissions
or other compensation (Rule 31a-1(b)(9) of the 1940 Act) . *
3. A record in the form of an appropriate memorandum identifying the person or
persons, committees, or groups authorizing the purchase or sale of portfolio
securities. Where an authorization is made by a committee or group, a record
shall be kept of the names of its members who participate in the authorization.
There shall be retained as part of this record any memorandum, recommendation,
or instruction supporting or authorizing the purchase or sale of portfolio
securities (Rule 31a-1(b)(10) of the 1940 Act) and such other information as is
appropriate to support the authorization. **
4. Such accounts, books and other documents as are required to be maintained by
registered investment advisers by rule adopted under Section 204 of the Advisers
Act, to the extent such records are necessary or appropriate to record the Money
Manager's transactions made with respect to the Portfolio. (Rule 31a-1(f) of the
1940 Act).
5. All accounts, books, records, or other documents that are required to be
maintained pursuant to the 1940 Act, the Advisers Act, or any rule or regulation
thereunder, need only be retained by the Money Manager as required under such
laws, rule or regulations. Any other account, book, record or other document
that is required to be maintained by the Money Manager pursuant to this Exhibit
B need only be maintained for six years after the date of its creation.
* Maintained as property of the Portfolio pursuant to Rule 31a-3(a) of the
1940 Act.
** Such information might include: the current Form 10-K, annual and quarterly
reports, press releases, reports by analysts and from brokerage firms
(including their recommendations, i.e., buy, sell, hold), and any internal
reports or portfolio manager reviews.
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MEEDER
ADVISOR FUNDS
6000 Memorial Drive
Dublin, OH 43017
614-760-2159
Toll Free 800-494-3539
Fax: 614-766-6669
meederadvisorfunds@meederfinancial.com
Investment Company Act File No. 811-6720